U.S. bond yields slid again on Friday after recent data pointed to a slowing economy as investors await an auction of 20-year Treasuries on Monday.
What’s happening
-
The yield on the 2-year Treasury
BX:TMUBMUSD02Y
was 4.81%, down 3.1 basis points. -
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
was 4.4%, down 4 basis points. The 10-year yield was 5% as recently as mid-October. -
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
was 4.57%, down 4.5 basis points.
What’s driving markets
Weekly U.S. jobless benefit claims data, regarded as the earliest warning signal of a recession, showed a rise in data released Thursday.
Continuing claims have climbed to the top end of the range from 2018 and 2019, but at the same time, they fit a seasonal pattern where the labor market appears to improve early in the year and deteriorate toward the end of it, say strategists at BCA Research.
“The implication is that it is possible that the data begins to send a more positive message about labor market conditions in early 2024, potentially signaling that the recession is not imminent,” they said.
However, there are other indications that economic activity is slowing and inflat, and prices, are deteriorating, notably the CPI and PPI data released earlier in the week, as well as the observation from Walmart’s CEO that the U.S. may soon be experiencing outright deflation.
October housing starts highlights the U.S. economic calendar, which also includes a number of Federal Reserve policymakers speaking.
The U.S. is scheduled to auction $16 billion of 20-year notes on Monday.
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